FSA: no plans to ban legacy commission for advisers

The Financial Services Authority has confirmed it is not looking to impose a ban on adviser commission for advice given before the end of the year.

It also said that its proposed ban on cash rebates paid to consumers, as outlined in its platforms consultation paper, would apply to new business only.

A spokesperson for the watchdog said, despite speculation, ‘there is nothing in our existing or proposed rules which would ban all commission for business written on platforms, including legacy arrangements.

‘Clearly, we have to consult on any new rules before we introduce them. If you look at the platforms consultation paper, it is clear that we have not consulted on these issues.

‘The rules on adviser charges are clear: advisers can continue to receive trail commission for advice given before 31 December 2012. They must be paid out of adviser charges for any new advice, given from that point onwards,’ the spokesperson added.

The regulator also reiterated its broader position on the commission advisers receive: ‘We have no current plans to extend the RDR [retail distribution review] ban on commission for advised sales to non-advised sales, although as we have said, we will keep this under review.

‘In particular, we will look to see if firms exploit the distinction between advised and non-advised services in a way that is likely to lead to poor consumer outcomes.’

The FSA decided to speak out after speculation swirled on Thursday that plans were afoot to introduce a total ban on fund commission payments.

It had been speculated that the City watchdog was in talks with industry players, with its discussions aimed at introducing a blanket ban from 2014.

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